As if starting a legal marijuana business isn't hard enough, scoring investment capital can seem almost impossible. Yet some entrepreneurs have managed to do both—to the tune of over $50 million. What's their secret? We talked to a few to find out the best ways to approach investors.

1. Be candid and don't B.S

It's natural to be excited about your company. However, investors will not appreciate any form of overestimation. “Most seasoned investors can see through the smoke and buzzwords that entrepreneurs like to use when describing their companies,” said Marion Mariathasan, co-founder and CEO of Simplifya. “Show enthusiasm about the company and concept without using too many cheesy buzzwords--be confident, but also realistic.”

Simplifya has raised capital for both their Series A ($1 million) and Series B ($3 million), following the founders found of $350,000, for a total of $4.35 million.

2. Don't dwell on the numbers

Sales of legal cannabis in North America are growing even faster than experts originally forecast. Investors know the market is big and getting bigger, and they're looking to make big bets. But entrepreneurs should be careful not to put too much focus on the size of the market and the rate of growth in their sales pitch.

“Entrepreneurs tend to lean on the fact that this is the fastest growing industry in the world. Just saying this industry is going to be huge doesn't offer the validation investors need to determine whether this is an industry worth going after,” said Keegan Peterson, founder and CEO at Wurk.

Peterson and his team have raised a total of $6.2 million, with $3.2 million in their last round led by Poseidon Asset Management.

3. Be ready for rejection

Kyle Sherman , founder and CEO of Flowhub has received his share of "No's", but he's also successfully raised more than $8 Million, from investors including Phyto Partners and Green Lion Partners.

He credits perseverance for his success. “I've seen a lot of entrepreneurs give up. You're going to be told no a lot and you have to be okay with the rejection. Take notes, understand why, adjust, and keep talking to more people. You need to be passionate about what you're doing to get through the tough times or it will be too easy to give up,” shared Sherman.

4. Don't treat all money as the same

Time is money, as the adage goes. So take the time to know who it is you are meeting and why. “Be deliberate about the investors you meet with and set deadlines across the fundraising process,” says Ryan Smith, Founder of Leaflink.

Also keep in mind that not all money is the same, so be selective about investors who can add value to your organization, both culturally and based on experience.

Leaflink has raised $14 million to date, with investors including Lerer Hippeau, Phyto Partners and Casa Verde Capital.

Nick Kovacevich, CEO of Kush, agrees. “Know your investor. Some will not have the appetite for businesses that touch the plant or over-expose themselves to regulatory challenges.”

Regardless of how much money your company is looking to raise, there are some very basic rules that should be kept in mind.

“There is a fascination among entrepreneurs and the media with raising money and closing large capital rounds, that has companies looking to fundraising as a goal in and of itself,” said Smith. “Raising money is not even the first step. The rubber begins to hit the road with how effectively you are able to use the capital to grow.”

5. Show that your product fills a need

Ask yourself: Does your product solve a real problem in the space? Are you bringing new technology to the industry that differentiates your company from the rest?

Adrian Sedlin, CEO of Canndescent says, “Entrepreneurs should recognize that there are hundreds of cannabis deals circulating right now. Given this, the would-be cannapreneur must craft a distinctive story that solves a real problem.”

Canndescent, a major California cultivation company, recently closed a $10 million Series B offering to finance the launch of new products and expand its production capacity by roughly eightfold.

6. Download Cannabis 3.0

According to Giadha Aguirre de Carcer, Founder and CEO of New Frontier Data, the cannabis market has matured considerably over the last 4 years. Back in the Cannabis 1.0 days (around 2014/15), average checks written by investors may have been between $150K to $250K. Now in Cannabis 3.0, it’s not uncommon to see check sizes of $1 million +.

But with more money comes more responsibility. “Raising money in this 3.0 environment no longer allows for the type of ‘shortcuts’ or ‘light decks’ we saw in prior years," sats Aguirre de Carcer. "Today entrepreneurs looking to raise money must adhere to much more stringent business planning requirements, financial planning criteria, and ultimately understand that investors are highly sophisticated and have a plethora of options to invest in, not only in the US, but candidly across the globe (there are about 60 countries decriminalizing or legalizing cannabis around the world today),” shared .

Aguirre de Carcer and her team at New Frontier Data raised over $15 million to date.

She tempers her optimism with this friendly warning: "While the cannabis industry is absolutely evolving and maturing, there are still questionable characters who do not necessarily appear to be dubious.”

From retailers to growers, producers, and suppliers, there’s a seemingly never-ending list of startup opportunities in this emerging market. In Start Your Own Cannabis Business, marijuana, biotech, and entrepreneurship reporter Javier Hasse introduces forward-thinking entrepreneurs like you to the industry and shares hard-earned tips and success stories from pioneers and visionaries in the marijuana industry.

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